Twitter Buys Mobile Ad Firm MoPub

Twitter said Monday it acquired a mobile advertising firm MoPub, its latest effort to ramp up revenue ahead of a much-anticipated initial public offering.

The deal was estimated to be worth around $350 million or higher, based on Twitter’s valuation, according to two people close to the matter. One person said that there were other bidders involved.

MoPub automates buying and selling mobile ads, part of a movement in the digital ad industry towards “programmatic advertising,” or the computerized buying and selling. This deal means Twitter is moving into being a middle man for ad sales across the mobile landscape, not just sellers of ads on its own properties.

“It’s actually a great extension of what we’ve already been doing,” Kevin Weil, Twitter’s vice president of revenue products, said in an interview. Twitter has made mobile ads the centerpiece of its business strategy, to capitalize on the growing usage of smartphones and tablets to do everything from shopping to keeping up friends.

Twitter has said it consistently generates the majority of its revenue from ads on mobile devices, as opposed to ads on the desktop Twitter.com.

Weil said there is “immense overlap” between MoPub and Twitter’s advertising abilities. “We think we can make their business stronger and we believe they can bring technology” that would conversely benefit Twitter.

Twitter said it would continue to invest and expand in MoPub’s core products.

MoPub CEO Jim Payne will become avice president and report to Twitter’s Chief of Revenue Adam Bain. The MoPub executive will bring with him the company’s nearly 100 employees, most of whom are based in San Francisco and New York.

Twitter is looking to crank out more ad-based revenues ahead of a potential IPO sometime next year. Twitter’s revenues are estimated to reach $1.33 billion in 2015, about $811.3 million of which is expected to come from mobile-based ads, according to research firm eMarketer. The firm estimates Twitter’s worldwide ad revenues this year are $582.8 million, about $308.9 million of which are derived from mobile ads.

The micro-blogging service has been on a shopping spree to firm up its advertising capabilities. The purchase comes less than two weeks after it acquired Tendrr, a social television analytics firm, to help Twitter better target ads that complement television broadcasts.

The blog TechCrunch earlier reported the price of the deal was $350 million.